In bid to boost competition in banking sector, New Zealand Government has transferred Kiwibank’s assets to state-owned company

New Zealand’s government has declared that it will transfer Kiwibank’s assets to a recently incorporated state-owned company due to the bank’s misalignment with the long-term goals of the two state entities that own it. Kiwibank is the fifth-largest retail bank in New Zealand, was formerly owned by state-owned entities including New Zealand Post,

The transaction, valued at NZ$2.1 billion, will be funded by the government through a multi-year capital allowance, which was already included in the borrowing programme published in 2022. The new company will be owned by the state and will ensure that Kiwibank has access to capital to continue growing on a commercially sustainable basis while offering a competitive alternative to New Zealanders.

The decision to transfer Kiwibank’s assets to a new state-owned company is part of the government’s broader efforts to strengthen the banking sector and ensure greater competition within the industry. The government is committed to supporting Kiwibank in becoming a genuine competitor in the banking industry and offering a viable alternative to other commercial banks in the country.

Kiwibank has been operating as a standalone entity since 2002, with the aim of providing more competition in the retail banking sector. The bank has been successful in attracting a significant number of customers, particularly in the personal banking and small-to-medium-sized enterprise (SME) segments. As of June 2021, Kiwibank had a customer base of over one million, with deposits of NZ$20 billion and lending of NZ$24 billion.

The transfer of Kiwibank’s assets to a new state-owned company is expected to help the lender to access more capital and achieve its growth plans while continuing to provide competitive banking services to New Zealanders. The move is also expected to support the government’s broader objectives of improving competition in the banking sector and ensuring that consumers have access to a range of banking services and products.

The decision to transfer Kiwibank’s assets to a new state-owned company has been welcomed by the banking industry and consumer groups, who have been calling for greater competition in the sector. The move is expected to provide more options for consumers and create a more level playing field for smaller banks and new entrants.

Overall, the transfer of Kiwibank’s assets to a new state-owned company is an important step towards improving competition in the banking sector and ensuring that New Zealanders have access to a range of banking services and products. The move will also help Kiwibank to achieve its growth plans and continue providing competitive banking services to its customers.